Freemium applications are driving in-app purchases according to a new report from Distimo, which was completed for the Verizon Developer Community. It is like getting a free ice cream sample at Baskin-Robbins: give a consumer a taste of something for free and then let them come back for more. Just 4% of all iPhone applications feature in-app purchases but, among the 200 highest-grossing applications in the iTunes App Store, 72% of the application revenue came from those with in-app purchases. That figure is up from just 28% last year. The revenue landscape is similar in the Android Market. 68% of the 25 top-grossing apps in the Android Market offer in-app purchases. Distimo also found that the average application in the iTunes App Store costs $3.84 while the average Android application costs $3.30. More →
A few weeks back, a patent-holding company called Lodsys began contacting developers and asking them to cough up money for using their in-app purchasing technology without a license. Apple intervened briefly and said that its developers are covered under its own license, but now the company has taken the matter to court with an official movement to intervene. The motion officially states:
Apple Inc. hereby respectfully moves to intervene as a defendant and counterclaim plaintiff in the above-captioned action brought by plaintiff Lodsys, LLC against seven software application developers for allegedly infringing U.S. Patent Nos. 7,222,078 and 7,620,565. Apple seeks to intervene because it is expressly licensed to provide to the Developers products and services that embody the patents in suit, free from claims of infringement of those patents.
Hit the jump for more of the back story. More →
A firm called Lodsys has been targeting Apple and Android developers that it believes are using its in-app purchase technology illegally. Despite Apple’s efforts to argue that its developers are covered under the same license, Lodsys doesn’t appear to be letting up anytime soon — it’s giving developers 21 days to cough up licensing fees before it files lawsuits. In a few recent blog posts, Lodsys explained its position on the matter:
[Apple's] letter was very surprising as Apple and Lodsys were in confidential discussions and there was clearly disagreement on the interpretation of the license terms of Apple’s agreement. Before, during and after these interactions, Lodsys has carefully considered this issue and consulted several legal experts to consider Apple’s claims. We stand firm and restate our previous position that it is the 3rd party Developers that are responsible for the infringement of Lodsys’ patents and they are responsible for securing the rights for their applications. Developers relying on Apple’s letter do so to their own detriment and are strongly urged to review Apple’s own developer agreements to determine the true extent of Apple’s responsibilities to them.
Lodsys is so confident that it has the upper hand in this legal battle that it’s offering developers $1,000 if courts rule that Apple’s license does, in fact, cover them. According to MacRumors, the developers currently being targeted include Combay, Iconfactory, Illusion Labs, Machael G. Karr, Quickoffice, Richard Shinderman, and Wulven Games. Google has yet to respond to Lodsys’ complaints against Android developers. More →
Earlier this month a company called Lodsys began sending letters to iOS app developers using Apple’s in-app billing system, asking each to license its technology separately. In a blog post on May 15th, Lodsys explained on its website that “the scope of [Apple's] current licenses does NOT enable [Apple] to provide ‘pixie dust’ to bless another (third party) business applications.” On Monday Apple issued a response to Lodsys explaining that iOS developers are safe under its licensing program. “Apple is undisputedly licensed to these patents and the App Makers are protected by that license,” Bruce Sewell, Apple’s senior vice president and general counsel, said. “The technology that is targeted in your notice letters is technology that Apple is expressly licensed under the Lodsys patents to offer to Apple’s App Makers.” It sounds like developers that have received the notification letters can breathe easy knowing that Apple appears to be offering some support. Hit the jump for more from Sewell’s letter to Lodsys. More →
Google announced on Friday that it will launch in-app billing for the Android Market next week. In-app billing will allow users to purchase more content directly within an-app — sort of like when you drop your entire allowance to buy more berries in Smurf’s Village on the iPhone. Google also said that developers can now begin testing in-app billing by uploading apps to the Developer Console, and developers can also create catalogs of in-app purchases, set prices, and then test the actual transaction process. Hit the jump to read more directly from Google’s Android Developers blog. More →
At a streamed press conference Friday, Rovio CEO Peter Vesterbacka announced the creation of a new mobile payment system dubbed Bad Piggy Bank. Rovio is the development company responsible for the creation of the wildly popular mobile game, Angry Birds. Bad Piggy Bank is an in-app payment solution for the Android platform that will allow users to purchase application upgrades, or unlock an ad-free version of the app, without the need of a third-party, credit-card based service. The service partners with local wireless providers and in-app purchases are billed directly to the users wireless account. Mr. Vesterbacka said his company plans to make the new payment method available to all Android developers in the near future. Angry Birds has eclipsed the 50 million download mark, 10 million alone on the Android platform. More →